The British Virgin Islands has hit out at the United Kingdom’s plans for its Overseas Territories to publish publicly accessible registers naming the beneficial – or real – owners of firms, saying it already provides the UK with such information and the scheme could have a negative impact on its economy.
MPs from both the Tory and Labour parties have endorsed amendments to the Sanctions and Anti- Money Laundering Bill requiring the OTs to have public registers.
The development comes following increasing calls for the real owners of firms to be revealed publicly towards preventing criminals from secretly stashing their cash in corporate vehicles and complex schemes.
The new plans have stirred up strong criticism from the OTs, including the BVI, which indicated that the new measures could harm it financially, especially after its economy was hit by hurricanes last year.
“We believe that in the absence of a global standard and a level playing field, the imposition of public registers of beneficial ownership on the Virgin Islands could have negative economic consequences. It is unfortunate that this development has taken place as we continue to recover from last years’ disasters,” said Premier Dr Orlando Smith.
Smith described the policy as “deeply flawed,” saying the BVI already provides verified beneficial ownership information to the United Kingdom and other law enforcement authorities.
OTs such as the BVI rely on their financial services sectors as key income generators. Frequently labelled ‘tax havens,’ the OTs are known for low tax rates and corporate secrecy.
The new public registers would likely scupper the latter, forcing firms to reveal information previously sealed off to the public.
According to June 2017 BVI government statistics, about 396,684 firms are registered in the BVI, which has a population of around 30,000 people.
The businesses are responsible for an estimated $1.5 trillion of assets invested around the world, according to research conducted for BVI Finance.
In his statement, Premier Smith sought to assure investors over the UK’s announcement, saying: “We recognise the key role of our private sector partners that support the financial services sector and appreciate their continued commitment to this Territory.
“You can all be assured that my Government will do all in its power to ensure that all residents and citizens play their best and rightful roles in our economic future.”
Asked to respond to the OTs’ criticism to the public registers plan, a UK government spokesperson said: “We have a close and long-standing relationships with our OTs and following this amendment our intention is to work together with them to ensure the best possible outcome.”
– Irene Madongo